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Striking a fair balance is more important than legal categorisation when considering whether compensation is required for an interference with property rights

There is not a clear-cut, or crucial, distinction between expropriation and control of use when it comes to a breach of the right to peaceful enjoyment of possessions under Article 1 of the First Protocol to the European Convention on Human Rights ("A1P1"). It may not be necessary to find the facts of a case as definitively falling into one category.

The need to attach special importance to the protection of the environment does not detract from the need to draw a fair balance between the public and private interest.

A1P1 gives no general expectation of compensation for adverse effects and where proper consideration has been given by the authorities to the issue of fair balance, weight should be given to their assessment by the court.

Background

The claimant had a right to fish salmon, by way of a licence, in the Severn estuary. The Environment Agency ("the Agency") then imposed annual fishing limits which had the effect of reducing his catch by 95%. The claimant received no compensation. The relevant statutory framework gave the Agency a broad discretion to impose conditions on the use of a fishing license where it considered it necessary to do so for the protection of any fishery. These limits were considered by the Agency to be necessary for the protection of salmon in an area that had been designated as a special conservation area under the EU Habitats Directive. The Court of Appeal agreed with the judge at first instance and found that the Agency's decision amounted to unlawful interference with the claimant's A1P1 rights in the absence of compensation.

Supreme Court Judgment

Interferences with the right to peaceful enjoyment of possessions under A1P1 can be broken into different categories. Some interferences are a total deprivation of the property rights, whereas others only amount to a control of use of that property. Generally speaking a deprivation will require compensation whereas the position is not as clear cut in a control of use case.It was accepted that the imposition of the limit was a proper exercise of the Agency's power to control fishing in the interests of environmental protection. The main issue on appeal to the Supreme Court was whether the conditions imposed by the Agency amounted to control of use or de facto expropriation under A1P1. If the conditions amounted to control, the question was whether "fair balance" required compensation to be paid to the claimant. If they were found to amount to expropriation, the question was whether any exceptional circumstances justified the absence of compensation. The Agency argued that the restrictions amounted to control of use only, despite the adverse effects on the claimant, referring to European Court of Human Rights case law where landlords' rents were greatly reduced but the court found there had been no de facto expropriation as they still retained the right to use their property. The Agency argued that a fair balance had been drawn on the facts due to the importance placed on the protection of the environment in case law and submitted that it would be contrary to public policy and inconsistent with the "polluter" pays principle for public funds to be used to pay compensation to individuals such as the claimant whose activities were found to have caused environmental damage. The claimant argued that the effect of the conditions was to nullify the practical use of his lease and therefore amounted to expropriation. It was argued that even if the court made a finding of control, the court were still entitled to find that he had suffered an excessive and disproportionate burden, such that a breach of A1P1 could only be prevented through compensation. The relevant statutory framework itself recognised that compensation may be necessary in certain cases. The Supreme Court accepted that Strasbourg case law did not show a clear-cut distinction between control and expropriation. They also accepted that the protection of the environment was an important factor, however this does not detract from the need to draw a fair balance or from the relevance of compensation. The Supreme Court agreed with the approach of the courts below in not finding it necessary to categorise the measure in question as either expropriation or control, but noted that it "eliminated at least 95% of the benefit of the right", making it "closer to deprivation than mere control" which was relevant to finding a fair balance. The Agency had given no consideration to the impact on the claimant's livelihood despite the fact that the impact had been greater on the claimant compared to others who had licences for leisure purposes. The Supreme Court upheld the decision of the courts below, but emphasised that this was an exceptional case of the facts and recognised that national authorities do have a wide margin of discretion to impose necessary environmental controls.

Comment

The facts of this case were extreme and the conditions imposed had resulted in the claimant suffering a severe and disproportionate impact on his livelihood. The protection of the environment is clearly an important remit of national authorities and the court recognised that the authorities do have a wide margin of discretion in imposing necessary environmental controls, however it is equally clear that they are required to give proper consideration to striking a fair balance between public and private interests and where this is done, the courts are likely to give due weight to their assessment. The Supreme Court emphasised that A1P1 does not give a general expectation of compensation for adverse effects but the courts are willing to consider whether a fair balance has been struck on the facts in order to determine whether compensation is required. Moving away from the strict categorisation of earlier A1P1 case law to a more general consideration of what fairness requires in the circumstances demonstrates greater flexibility from the courts.

Compare jurisdictions:Arbitration

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